NEC Corp. (JP:6701)
:6701
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NEC
(6701)
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Rating:70Outperform
Price Target:
¥4,888.00
▲(13.38% Upside)
Action:UpgradedDate:04/30/26
The score is primarily supported by improving financial performance, led by stronger earnings and accelerating free cash flow alongside a strengthening balance sheet. Technicals are moderately positive but constrained by trading below longer-term averages. Valuation is the main headwind due to a higher P/E and low dividend yield.
Positive Factors
Improving profitability and cash generation
NEC's multiyear profit and cash-step-up (net income 115B in 2023 to 270B in 2026; OCF 152B to 438B) signals durable operating improvement. Strong cash generation enhances reinvestment capacity, funds working-capital needs, lowers financing reliance, and supports strategic execution over 2–6 months and beyond.
Negative Factors
Uneven top-line momentum and margin visibility
Revenue growth has been inconsistent, with a revenue decline in 2025 versus 2024 and limited 2026 margin detail. This uneven top-line and lack of recent margin metrics make sustained margin expansion harder to validate and raise execution risk for durable profit forecasts.
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Positive Factors
Negative Factors
Improving profitability and cash generation
NEC's multiyear profit and cash-step-up (net income 115B in 2023 to 270B in 2026; OCF 152B to 438B) signals durable operating improvement. Strong cash generation enhances reinvestment capacity, funds working-capital needs, lowers financing reliance, and supports strategic execution over 2–6 months and beyond.
Read all positive factors
NEC (6701) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥5.48T
Dividend Yield0.55%
Average Volume (3M)4.22M
Price to Earnings (P/E)10.0
Beta (1Y)0.92
Revenue Growth4.65%
EPS Growth54.39%
CountryJP
Employees105,276
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)202.94
Shares Outstanding1,364,249,300
10 Day Avg. Volume5,395,680
30 Day Avg. Volume4,216,096
Financial Highlights & Ratios
PEG Ratio0.35
Price to Book (P/B)2.33
Price to Sales (P/S)1.43
P/FCF Ratio13.91
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥6,300.00Price Target Upside46.14% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)224.38
Revenue Forecast (FY)¥3.76T
NEC Business Overview & Revenue Model
Company Description
NEC Corporation operates as a provider of information and communication technology solutions in Japan and internationally. The company operates in five segments: Public Solutions, Public Infrastructure, Enterprise, Network Services, and Global. It...
How the Company Makes Money
NEC primarily makes money by selling and operating technology solutions for organizations, earning revenue through a mix of (1) project-based systems integration and delivery, (2) ongoing services and support, and (3) product and infrastructure sa...
NEC Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Neutral
The earnings call highlights several positive outcomes, including record revenue and profit growth, strong performance in IT services, and significant free cash flow increase. However, these are balanced by notable challenges such as losses in the submarine cable business and investment outflows. Thus, the overall sentiment is mixed, with a balance of achievements and challenges.Positive Updates
Record Revenue and Profit Growth
Revenue for FY March 2025 was JPY3,423.4 billion, with a non-GAAP operating profit (OP) of JPY311.3 billion, achieving the mid-term management plan's targets a year ahead of schedule. Revenue increased by 5.3% year-on-year, and non-GAAP OP increased by JPY98.9 billion.
Negative Updates
Submarine Cable Business Loss
The submarine cable business recorded a JPY14 billion loss due to force majeure issues, resulting in project delays and additional costs.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Revenue and Profit Growth
Revenue for FY March 2025 was JPY3,423.4 billion, with a non-GAAP operating profit (OP) of JPY311.3 billion, achieving the mid-term management plan's targets a year ahead of schedule. Revenue increased by 5.3% year-on-year, and non-GAAP OP increased by JPY98.9 billion.
Read all positive updates
Company Guidance
In the recent call, the company provided guidance for the fiscal year ending March 2026, projecting revenue of JPY3.36 billion and a non-GAAP operating profit (OP) of JPY320 billion. This represents an increase of JPY20 billion from the mid-term management plan target, despite macroeconomic uncertainties. The adjusted OP is expected to be JPY310 billion, factoring in ongoing structural reforms. The IT services segment is projected to post revenue of JPY2.15 trillion with an adjusted OP of JPY263 billion, while social infrastructure is expected to achieve revenue of JPY1.16 trillion and adjusted OP of JPY100 billion. The company also noted plans to increase investment in growth areas while maintaining a disciplined approach to capital allocation, applying cash ROIC evaluation for M&A transactions. The guidance reflects a continued focus on increasing profitability, even amid challenging conditions, and highlights strategic efforts to enhance operational efficiency and future growth potential.NEC Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
81
Very Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.58T | 3.42T | 3.48T | 3.31T | 3.01T |
| Gross Profit | 1.18T | 1.06T | 1.01T | 958.25B | 886.41B |
| EBITDA | 530.24B | 422.03B | 382.92B | 356.76B | 330.96B |
| Net Income | 270.23B | 175.18B | 149.52B | 114.50B | 141.28B |
Balance Sheet | |||||
| Total Assets | 4.47T | 4.32T | 4.23T | 4.04T | 3.82T |
| Cash, Cash Equivalents and Short-Term Investments | 659.03B | 584.62B | 476.49B | 419.46B | 430.78B |
| Total Debt | 489.21B | 666.36B | 573.64B | 608.48B | 597.38B |
| Total Liabilities | 2.18T | 2.24T | 2.14T | 2.13T | 2.04T |
| Stockholders Equity | 2.20T | 1.95T | 1.92T | 1.62T | 1.51T |
Cash Flow | |||||
| Free Cash Flow | 368.14B | 218.00B | 171.46B | 74.41B | 76.41B |
| Operating Cash Flow | 438.46B | 344.41B | 271.23B | 152.13B | 147.52B |
| Investing Cash Flow | -96.15B | -242.17B | -76.02B | -49.59B | -63.38B |
| Financing Cash Flow | -288.12B | 7.03B | -155.51B | -122.79B | -189.62B |
NEC Technical Analysis
Neutral
4311.00
Price Trends
4148.17
Positive
4885.62
Negative
4750.88
Negative
Market Momentum
-4.21
Negative
57.36
Neutral
84.50
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6701, the sentiment is Neutral. The current price of 4311 is above the 20-day moving average (MA) of 4033.45, above the 50-day MA of 4148.17, and below the 200-day MA of 4750.88, indicating a neutral trend. The MACD of -4.21 indicates Negative momentum. The RSI at 57.36 is Neutral, neither overbought nor oversold. The STOCH value of 84.50 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:6701.
NEC Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | ¥5.48T | 9.99 | 12.48% | 0.55% | 4.65% | 54.39% | |
67 Neutral | ¥5.33T | 13.04 | 15.02% | 0.68% | -1.33% | 108.40% | |
64 Neutral | ¥763.29B | 20.55 | ― | 1.39% | 5.45% | 7.26% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | ¥652.55B | 17.25 | 10.07% | 1.76% | 12.72% | 13.98% | |
59 Neutral | ¥2.38T | -9.13 | 22.48% | 1.14% | 6.52% | -83.73% |
* Technology Sector Average
JP:6701
NEC
4,035.00
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-17.27%
NEC Corporate Events
NEC Releases FY2026 Results and Issues Outlook for FY2027
Apr 28, 2026
NEC Corporation released its financial results for the fiscal year ended March 31, 2026, outlining the company’s performance over the period and providing historical data for investors. The company also issued forecasts for the fiscal year e...
NEC Raises Year-End Dividend Forecast on Solid Fiscal 2026 Results
Apr 28, 2026
NEC Corporation has revised its dividend forecast for the fiscal year ended March 31, 2026, raising the planned year-end dividend by 6 yen to 22 yen per share. This lifts the total annual dividend forecast to 38 yen per share, compared with the pr...
NEC Delivers Strong Profit Growth and Higher Dividends Despite Modest Revenue Rise
Apr 28, 2026
NEC reported consolidated revenue of ¥3.58 trillion for the year ended March 31, 2026, up 4.7% year on year, as operating profit jumped 40.3% to ¥359.9 billion and net profit attributable to owners of the parent climbed 54.3% to ¥27...
NEC Completes ¥27.3 Billion Share Buyback Ahead of Schedule
Mar 27, 2026
NEC Corporation has completed a share repurchase program authorized by its board on February 9, 2026, buying back a total of 6.8 million shares of common stock for approximately 27.29 billion yen. The latest tranche, executed between March 1 and M...
NEC Reports Progress on Share Buyback Program
Mar 13, 2026
NEC Corporation has repurchased 4,782,400 shares of its common stock on the Tokyo Stock Exchange between February 10 and February 28, 2026, at a total cost of about 18.77 billion yen. The buyback, conducted via discretionary trades, is part of a p...
NEC Launches ¥30 Billion Share Buyback to Bolster Shareholder Returns
Feb 9, 2026
NEC Corporation has authorized a share repurchase program under Japan’s Companies Act, approving the buyback of up to 6.8 million shares of common stock, or about 0.51% of its outstanding shares excluding treasury stock. The company set a ma...
NEC to Consolidate Major Enterprise and Public-Sector IT Business via Corporate Split
Feb 2, 2026
NEC Corporation will absorb the business for large-sized enterprises (excluding food services), governments, and municipalities from its wholly owned subsidiary NEC Solution Innovators through a simplified absorption-type corporate split effective...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.